Directors Flashcards
What type of decisions do directors reserve for shareholder approval?
Important decisions.
What decisions are directors generally free to make without shareholder approval?
Unreserved matters, such as:
* Employing individuals
* Selling and buying property
* Raising funds
* Authorising assets to be used as security.
Can the board of directors delegate decisions?
Yes, the board can delegate a particular decision.
Are directors accountable for their actions?
Yes, they can be made to account for wrongs through civil and criminal actions.
What is a De Jure Director?
A De Jure Director is appointed validly by law and must be a natural person. At least one director must be a natural person and must be at least 16 years old.
What is a De Facto Director?
A De Facto Director is someone who assumes to act as a director but has not been validly appointed.
What is a Shadow Director?
A Shadow Director is a person exerting influence over the board without being appointed as a director to avoid the duties of a director. They do not claim to act as a director.
How do Shadow Directors differ from De Facto Directors?
Shadow Directors do not claim to act as a director, while De Facto Directors do and are held out as such by the company without being formally appointed.
What is an Alternate Director?
An Alternate Director is provided for in some companies’ articles to take the place of a director when one or more directors are absent. This is rare now.
What is an Executive Director?
An Executive Director is appointed to executive office and is also an employee of the company.
What are the responsibilities of a Company Secretary?
The Company Secretary has the duty to keep company books up to date and produce minutes of board and general meetings. They do not make decisions on behalf of the company.
Is a private company required to have a Company Secretary?
No, a private company is not required to have a Company Secretary.
What qualifications must a Company Secretary have?
A Company Secretary must have requisite knowledge and expertise and one of the specified qualifications.
What dictates the appointment of directors?
Appointment is dictated by articles.
How can directors be appointed according to the MA?
Directors can be appointed via ordinary resolution or by directors.
What is required for executive directors?
Executive directors are employees and need a written contract of employment.
What is required for long-term service contracts?
Long-term service contracts (longer than 2 years) need shareholder approval.
What happens if a long term service contract is granted without SH approval?
Just the term relating to the period of more than 2 years is void. The contract is replaced by one with a ‘reasonable notice period’.
What disclosure is required for companies?
Every company should maintain its register of directors and keep registers at its registered office.
What must companies do if there is a change of directors?
Companies need to notify Companies House of changes relating to directors.
What address needs to be included in the company’s register of directors?
Only the service address for a director needs to be included in the company’s register of directors. Their residential address will be recorded but will kept private.
What information must be published in annual accounts?
- Information relating to salaries, bonuses, pensions
- Compensation paid to directors for loss of office
- Details of payments made to or receivable by a person connected to such a director or a body corporate controlled by a director.
What must a company do when a director leaves office?
The company must update the register of directors and give notice.
How can a director stop being a director?
- Resignation
- Vacation
- Removal
- Automatic termination
- Disqualification
- Retirement by rotation
